Using Business Process Automation to Forge Fraud-Resistant Supply Chain Compliance for ECCTA 2023

The Economic Crime and Corporate Transparency Act 2023 (ECCTA) marks a profound shift in UK corporate law, introducing a new 'failure to prevent fraud' (FTPF) offence that came into force on 1 September 2025. This strict liability offence holds large organisations criminally accountable for fraudulent acts committed by their 'associated persons', a broad category including employees, agents, and the entire supply chain, if the act was intended to benefit the organisation. With the penalty being an unlimited fine, the legislation effectively weaponises the supply chain against a company, making robust fraud prevention a board-level imperative.

The only statutory defence available is for an organisation to prove it had 'reasonable fraud prevention procedures' in place. Government guidance outlines six core principles for these procedures: Top-Level Commitment, Risk Assessment, Proportionate Procedures, Due Diligence, Communication, and Monitoring & Review. This requirement for a proactive, evidence-based framework renders traditional, manual procurement models obsolete. Their inconsistency, lack of visibility, and reactive nature are fundamentally ill-equipped to provide the auditable proof of compliance that a legal defence would require.

In response to this challenge, a strategic shift in supplier engagement is necessary. The article proposes an innovative 'opt-out' model, where compliance with enhanced anti-fraud standards becomes the default, non-negotiable condition of the business relationship. Unlike an 'opt-in' model that requires affirmative consent, this framework establishes a universal standard and shifts the burden of action onto suppliers who are unable or unwilling to comply. To continue the commercial relationship, a supplier implicitly accepts the new terms; to deviate, they must take the deliberate step of 'opting out'. This action immediately flags them as a higher risk, allowing for targeted intervention or offboarding. This model creates a powerful risk filter and a stronger evidence trail, demonstrating that new standards were communicated and accepted by default across the entire supply chain.

Business Process Automation (BPA) is the technological engine that makes this 'opt-out' framework scalable and legally defensible. BPA transforms the six principles of 'reasonable procedures' from abstract policies into automated, embedded controls within the procurement lifecycle.

Specifically, BPA enables organisations to:

• Automate Risk Assessment and Due Diligence: Standardised, automated onboarding workflows can trigger tiered due diligence based on a supplier's risk profile, integrating with third-party intelligence platforms for real-time screening.

• Systematise Contract Management and Communication: BPA platforms can manage a library of contracts with mandatory, locked anti-fraud clauses. The system automates the mass distribution of these new terms to all suppliers, creating a time-stamped record of delivery. Any supplier 'opt-out' action automatically triggers an alert for review by legal and procurement teams.

• Enable Continuous Monitoring and Review: Centralised dashboards provide a real-time view of the entire supply chain's compliance status. BPA facilitates continuous transaction monitoring to detect anomalies and automates periodic compliance re-certifications, ensuring the fraud prevention framework remains a dynamic, living system.

Implementing such a system requires a structured, four-phase approach: a thorough assessment of existing fraud risks and processes; the design of new anti-fraud contract clauses and 'opt-out' workflows; the careful implementation and integration of a BPA platform with existing ERP and finance systems; and a robust communication and change management plan to ensure adoption by both internal teams and external suppliers.

In conclusion, the ECCTA's 'failure to prevent fraud' offence necessitates a fundamental overhaul of supply chain risk management. By combining a strategic 'opt-out' model for supplier engagement with the operational power of Business Process Automation, organisations can move beyond mere compliance. This approach builds the transparent, resilient, and ethical supply chains required for sustainable success, transforming a significant legal obligation into a source of competitive advantage in an increasingly risk-conscious global marketplace.